Highlights
Yield Report: Southern valley in North Dakota saw wheat yields around 50 bushels, which is average to a little below. Bean yields have been in the 40 to 45 range, which is disappointing and early corn yields have been coming off around 150 to 160. The corn yields are very disappointing.
Thank you, Jacob Kubela, who is a grain market consultant in Wahpeton, North Dakota: jake@kubelahedging.com, (701)403 3472.
Banks and government workers will have a holiday Monday, but all the futures exchanges will trade normal hours for Columbus Day.
In 2014, Russia annexed Crimea, a peninsula into the Black Sea that had been a part of Ukraine since the Soviet Union collapsed 1991. The problem for the Russians was there was no land link from Russia to Crimea. So, Russia built the Kerch Strait Bridge, a very long bridge for ground traffic to connect Russia and Crimea. The bridge has very sophisticated sensors at every entry point that can detect the presence of drugs, explosives and chemicals. Yesterday morning, a vehicle loaded with explosives (some reports a train load of fuel) detonated on that bridge. Heavy damage closed the two side-by-side bridges, but very limited truck traffic resumed early this morning. It will probably take months to get all four truck lanes and the rail line fully operational.
Ukraine acknowledged their Special Forces executed the attack. It is the first attack by Ukrainian forces on sovereign Russian territory. The US government knew of the impending attack planned by Ukraine on the bridge. Ukraine’s leadership said it is ready to continue hostilities on the bridge as well as withstand additional Russian attacks on the citizens of Ukraine.
Several “insiders” believe that the strike on the bridge is an effort to goad Putin to use tactical nuclear weapons (small nukes) to motivate Western Europe and the USA to commit their military forces to “preserve the world” and do away with Putin’s threat once and for all.
Ukraine’s President Zelensky has called on NATO to launch a pre-emptive nuclear strike on Russia.
We had been recommending to price new crop hard red winter July wheat with a HTA at $9.98. If you placed that order or any order to sell any wheat, get it canceled if possible before the market opens this evening. We say again, this war is being fought in the breadbasket of the world.
November West Texas Intermediate Crude Oil futures have rallied $17.06 the last ten business days because the market was technically oversold and OPEC+ announced it would cut production 2 million barrels a day beginning in November to bring crude oil prices to the Saudis target of about $90 a barrel for Brent Crude (= about $82 to $84 for WTI).
With November futures at $92.64, it is about $9 above the target for November. Now, think about this:
The crude oil market is about $9 above the Saudi’s target for November.
If you owned an oil field, what would you do? You would short futures and produce oil at maximum capacity here in October and into November if you could get away with it.
If you were a refiner of crude oil, what would you do? You would scale back crude oil purchases as much as possible to barely keep your refinery running, short futures (hedge) refined products (gasoline, ULSD, and heating oil) in this overpriced market.
Therefore, it is logical to expect the October crude oil futures and the cash crude oil market to decline at least $8 the next three weeks. Remember, the anticipation of an event will move the market more than confirmation of the event. That is why they “buy the rumor and sell the fact”. The rumor was OPEC would cut one million bpd and then they cut it 2 million bpd. The extra million jumped price higher Thursday and Friday. This week is not the time to be pricing your fuel needs. Also, the seasonal price trend for crude is down into the last week of November.
Rain Days Update
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days